Trump Administration Offers New Rule That May Erode PPACA

January 4, 2018

So-called “association plans” would be cheaper but cover less

Workers would be allowed to band together to buy health insurance under a proposed rule released by the Department of Labor, The Hill reported. The proposal was issued in response to an executive order by President Trump, which would allow associations of workers to purchase cheaper health insurance that's not subject to the same rules as plans under the Patient Protection and Affordable Care Act (PPACA).

By allowing groups of people to purchase plans not subject to the PPACA’s rules for coverage, however, critics say the move could allow insurers to sell plans that do not cover pre-existing conditions or offer certain "essential health benefits." The requirement that insurers cover people with pre-existing conditions was a hallmark of the PPACA, and a provision that is broadly popular.

The Department of Labor cast the new rule as a way to expand access to health coverage, essentially arguing that this would allow more people to afford insurance by allowing the sale of cheaper plans, The Hill reported. "The goal of the rulemaking is to expand access to affordable health coverage, especially among small employers and self-employed individuals, by removing undue restrictions on the establishment and maintenance of association health plans," the proposal said.

Association health plans (AHPs) already exist, but they are limited under federal law.

The proposal would broaden the definition of "employer" under the Employee Retirement Income Security Act to allow more flexibility to workers with a "commonality of interest." The proposed rule would also expand the types of groups that can form an AHP and allow for membership across state lines. It would also allow self-employed individuals to take part in a large-group AHP.

Senator Rand Paul (R-Kentucky) has long been a champion of the AHP concept and has worked closely with the administration on the proposal. Paul praised the administration's efforts.

"Conservative health care reform is alive and well, and I will keep working with President Trump to build on this progress," Paul said in a statement.